China and the consequences anti-pollution measures

The Sauer Blog

Published: 22 May, 2015

Ron Sauer

Frequently we read about the actions being taken in China against pollution in the leather industry. Actions by newly appointed inspection units, raids, they come and go and many of us take it all with a pinch of salt. Some people believe it will just blow over.

From the latest statements made by the CLIA (China Leather Industry Association), I now think it will not blow over at all! We should also be aware that the leather industry is not the only industry touched by this change in policy. We have to admit that the Chinese government has started to take very serious action against ‘all’ polluting industries and they are right to do so! The leather industry is only one.

We in the raw materials trade have to look at the possible consequences. Even with tannery closures, the demand for the leather produced in these plants has not disappeared. Demand for leather has its own economic problems at the moment but it is not solely related to the Chinese pollution crackdown.

Therefore the question is: if the strict implementation of the new anti-pollution laws and regulations force more tanneries to close down (as it seems will happen). Or if such new laws make tanning no longer commercially interesting or technically possible, then who is going to produce that leather which the world still wants?

It could move to bigger, more efficient tanneries in China that are able to comply with the regulations. If so, nothing will change for the raw materials supply chain. Containers will just move to another factory in another town or province. However, if the economic and environmental issues become insurmountable, even some of the bigger players in the tanning industry could move outside China and if that is the case it will have an impact on the trade and the question will be where will it go?